The company was hit by a $2.3bn (£1.86bn) impairment charge due to reduced long-term expectations for oil prices. This impacted net operating income, which was a loss of $1.9bn compared to gains of $152m for the same period in 2015 and analysts' average forecast of a $2.1bn profit, according to Reuters.
Adjusted earnings were $1.66bn in the fourth quarter, down six per cent from $1.78bn the previous year and below analyst expectations of a rise to $2.27bn.
Shares in the Oslo-listed company were down more than three per cent in afternoon trading.
However, Statoil's outlook for 2017 says production will rise four to five per cent from 2016 and its forecast capital expenditure will rise to $11bn with spending on oil and gas exploration at $1.5bn.
Why it's interesting
Statoil's fourth quarter produced unexpected losses, in part due to an impairment charge on the value of its assets, but higher-than-expected production forecasts have cheered some analysts.
Teodor Sveen-Nilsen at Swedbank said: "We guess the market will like Statoil's 2017 guidance and probably forgive the major fourth quarter earnings miss," Reuters reported.
Despite recent gains, oil prices are still well below levels of more than $100 per barrel earlier in the decade.
Statoil said it expects benchmark Brent crude to reach $75 a barrel in 2020, compared with a previous forecast of $83, and $80 in 2030, compared with $100 before.
What Statoil said
President and chief executive Eldar Saetre said the company delivered solid financial results in the current price environment.
"Our result was impacted by the negative result from our international operations due to expensed exploration wells, high maintenance activity and impairment charges. We delivered strong production and solid operational performance across all segments in the quarter," he said.
“We achieved strong results from our improvement programme, $700m above our target of $2.5bn in annual savings. These are lasting effects, and we target an additional $1bn in 2017," he said.